Travel allowance - calculation and tax rules

What is Travel Compensation?

Travel compensation is financial compensation given for expenses related to work-related travel, such as transportation and accommodation. In this article, we go over what is included in the compensation, as well as what rules and restrictions exist. We also discuss how to calculate travel compensation.

Difference Between Business Travel and Business Travel

There are two types of travel for which you can receive travel compensation: business trips and work trips. In addition, some employers may offer free work trips such as job benefit. An employee may also be entitled to a deduction for repatriation if the accommodation is in another location. The way in which compensation is to be claimed is, among other things, one thing that differentiates them.

Compensation for travel on business trips

In simple terms, travel allowance for business trips is a financial compensation that the employer may pay to an employee who has travelled on duty. There are rules for the types of expenses that compensation may include. Usually it applies to:

1. Tickets for flights, trains, buses and taxis
2. Accommodation during the trip
3. Consumption such as breakfast, lunch and dinner
4. Some other expenses directly related to the trip

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Travel allowance for work trips

In the case of work trips, no compensation is paid from the employer as in the case of business trips. Here, as a rule, it is a tax deduction for travel to and from work that individuals may make in the tax return.

For different means of travel, varying amounts of compensation apply, but the total cost of travel to and from work in a calendar year must exceed SEK 11,000 (2024) for tax deductions to be possible. The Swedish Tax Agency continuously adjusts the target amount on its website.

The different means of travel that can be deducted are:

1. Auto
2. Moped and motorcycle
3. Bicycle
4. Shuttle service and taxi
5. Public transport
6. Aviation
7. Own boat

Work trips as a job benefit

Some employers pay for the employee's travel between the residence and the workplace. Although it is a form of work trip, since it counts as a benefit for tax purposes, the amount must be recorded as salary in the tax return. Then it is possible to make a tax deduction on that amount as well, according to the current deduction rules for work trips.

Should free work travel be the only compensation someone receives for a job, then the sum does not need to be taken up as salary. So it is tax-free. If, on the other hand, the compensation also includes, for example, accommodation and consumption, tax must be paid on the full amount.

It can also be added that compensation for work trips may also be tax-free if no other remuneration or benefit for the work is paid. The same applies if the compensation is not higher than the actual travel expenses or if the fuel allowance for travel by own car does not exceed SEK 18.50 per mile (2024).

Home Travel Deduction

If the employee lives in a place other than the place of work, it may be possible to receive deductions for travel to and from work. This rule applies throughout the EU and EEA area as well as in Switzerland. There are some basic requirements to follow when it comes to returning home:

1. The distance between the place of residence and the place where the workplace is located shall exceed 50 kilometers.
2. You must have stayed overnight at the place of work.

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Conditions for travel reimbursement

For those who plan to collect travel compensation, it is useful to find out in advance exactly what rules apply in that particular case. The Swedish Tax Agency's website contains all the information and the digital forms needed to be able to claim compensation. It is also important to find out the employer's company policy for travel compensation on business trips.

A basic rule when it comes to claiming travel compensation is that you need to save all the supporting documents and have travel reimbursement documentation that confirms the expenses. This applies to all types of business and business trips.

The documentation should indicate the date and time of the cost and also indicate who the charge applies to, for example, an air ticket. Examples of substrates can be:

1. Hotel bill
2. Airfare
3. Gasoline receipt
4. Restaurant Receipt

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Travel Allowance for Employers

The employer may post mile compensation, subsistence and other allowances tax-free for expenses if they do not exceed the applicable lump sum. Otherwise, the excess part of the compensation is counted as salary and the employer must make tax deductions and pay employer contributions in the usual order.

Unlike subsistence allowances, where compensation can also be made for increased costs during a business trip, travel reimbursement is usually paid for the actual costs at the cheapest price.

Tax-free travel allowance and deductions

What happens when a worker makes a deduction for travel to and from work in the tax return, is that the income on which the tax is calculated is reduced. Thus, when accounting for travel allowance in the tax return, the amount deducted cannot be deducted.

The applicant receives a reduction in taxable income and thus a reduction in tax in relation to the amount of tax and the tax burden in the taxing municipality. On the Swedish Tax Agency's website, you can get help with calculating the tax.

An important condition for receiving tax-free mileage compensation is that the compensation claimed covers the actual costs. In addition, it must comply with the employer's guidelines and tax rules for travel compensation.

Calculate travel allowance

When it comes time to claim travel compensation, the procedure differs depending on the type of compensation in question.

In the case of business trips, the employee must comply with the regulations of the employer. A common routine is to calculate and request reimbursement for their expenses in connection with the monthly absence report.

When it comes to mileage allowances and other driving allowances for commuting to and from work, it is a good idea to first add up the different amounts. If different means of transport have been used, separate calculations are made which are then summed up. Different amounts of deductions apply to the different means of transport.

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Request Travel Compensation

When you apply for travel allowance for work trips from the Swedish Tax Agency, you can follow these steps:

1. If you request driving compensation - calculate the distance and time gain. The amounts can be found on the Swedish Tax Agency's website.
2. Find out the distance between your residence and your place of work. For some means of transport, a minimum distance is required.
3. Calculate the number of travel days you have had to work.
4. For mile replacement with service car or your own vehicle, you can use the Tax Agency's flat rate as a basis for calculation. You can also deduct the cost of period passes in public transport, above a certain amount.

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Mynt simplify administration

It may seem difficult to apply for travel compensation for work trips, but if you stick to certain basic rules such as always collecting and saving all receipts and other supporting documents for your expenses, it is relatively easy.

If you have any questions about handling travel expenses, you are always welcome to contact us at Mynt. Mynt offers smart business cards and a simplified management of expenses that streamlines administration, especially useful when it comes to travel bills.

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